A common methodology to financing terrorism is the misuse of charities.  Charities are easy to form, have access to substantial funds, can be cash intensive, enjoy public trust and have legitimate reasons to operate in areas of conflict or where terrorist groups are known to exist.    

Businesses who undertake transactions on behalf of charitable organisations may wish to consider enhanced due diligence on the owners / operators of the charity, as well as the level of due diligence that the charity conducts on the recipients of donations.   

Transaction monitoring of charities or non-profit groups may provide red flags to any unusual activity.   Unusual activity of a charity account may include -

• use of multiple ATM cards or a credit card account;

• the asset value of the charity does not correspond with information as provided at account opening;

• large and frequent cash withdrawals;

• use of multiple accounts to receive wire transfers;

• use of wire transfers to send funds to a small number of beneficiaries.